February 2004

Employees value communication about pay policies

Talk to your employees about your pay policies. That’s the overriding conclusion of a survey on pay satisfaction, taken by the nation’s largest association of human resources professionals.

According to the Society for Human Resource Management (SHRM) and CNNfn’s Job Satisfaction Series: Job Compensation/Pay Survey, just 45 percent of employees agree that their organization’s pay policy is fair. In addition, 27 percent feel that base pay does not fairly represent their contributions compared to other employees.

But money itself is not the most tangible satisfier for employers. Instead, employees want to know pay policies and feel that they are fair, compared to their contributions to your organization.

“Although compensation is only one component of overall job satisfaction, communication within the organization is another. Organizations should take every opportunity to communicate with their employees on issues of importance in the interest of transparency and open communication within the organization,” said Susan R. Meisinger, president and CEO of SHRM.

Illustrating the importance of communication, the survey found that nearly half of the employees who were dissatisfied with the communication explaining how their pay was determined were also dissatisfied with their total compensation package. Conversely, when employees understand how compensation is determined, they tend to be more satisfied with their compensation packages and jobs overall.

One demographic-specific finding reflected generational differences. Workers age 56 and older indicated compensation contributed more to their overall job satisfaction than workers age 35 and younger. This correlates to the belief that less work experience may mean less money. It may also speak to existing generational differences where Generation X and Y workers base job satisfaction more on work/life issues, communication between management and employees, and career advancement opportunities than on compensation.

Source: Society for Human Resource Management, www.shrm.org

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